Fed Holds Rates at 4.25%-4.50%, Says Cuts Depend on Clearer Inflation Progress

The Federal Reserve kept its benchmark interest rate unchanged at 4.25% to 4.50% after its latest policy meeting, signaling that borrowing costs are likely to remain elevated until inflation shows more convincing signs of easing.

In its statement, the central bank pointed to persistent price pressures that remain above its 2% target, reinforcing a cautious stance on monetary policy. Fed Chair Jerome Powell said rate cuts are not imminent and that policymakers need to see sustained progress on inflation before considering any move to lower rates.

The decision was widely expected by investors, but Powell’s remarks tempered hopes for near-term easing. Market participants had been looking for clues on when the Fed might begin cutting rates, especially as economic growth slows in some sectors and financial conditions remain tight.

US stock futures edged lower following the announcement, while the dollar strengthened against major currencies as traders adjusted expectations for the timing of future rate cuts. The Fed’s message suggests it remains focused on restoring price stability, even if that means keeping policy restrictive for longer than some investors had anticipated.